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GST Slab Rates in India

GST Rates

Last Updated 19th Sep 2020

Slab Rates Popular Goods Popular Services
5% Frozen vegetables, Fertilizers, Spices, Plastic waste Newspaper printing, Takeaway Food, Restaurants
12% Ghee, Nuts, Fruits, Pouches, purses and Handbags Temporary basis IP rights, Building construction for sale
18% Washing Machine, Camera, Shampoo Outdoor Catering, IT services, Telecom services
28% Sunscreen, Motorcycles, Pan Masala Cinema, Food/Drinks/Stay at AC Five Star Hotels

Various GST Tax Slabs in India

In India, there are 4 types of GST rates:

GST Slab of 5%

Under this slab, the goods of basic amenities are covered such as sugar, oil, spices, coffee, coal, fertilizers, tea, ayurvedic medicines, agarbatti, sliced dry mango, cashew nuts, sweets, handmade carpets, lifeboats, fish fillet, unbranded namkeen, and life-saving drugs are covered.

The services under this slab include railways, airways, takeaway food, AC and Non-AC restaurants, hotel rooms with a tariff less than Rs. 7,500, and special flights for pilgrims.

GST Slab of 12%

Under this slab, products like cell phones, sewing machine, umbrella, jewelry box, along with processed foods like frozen meat, fruit juices, butter, cheese, ghee are covered.

The services under this slab include business class flight tickets and movie tickets below Rs. 100.

GST Slab of 18%

Under this slab products like hair oil, safety glass, pasta, pastries, ice-cream, mineral water, hair shampoo, oil powder, water heaters, washing machine, detergent, scent sprays, leather clothing, cookers, oil powder, cutlery, binoculars, artificial flowers, wristwatches, suitcase, briefcase, shaving, after-shave, furniture, stationery items, mattress monitors, television screen, lithium-ion batteries, video games are covered.

The services under this slab include restaurants within hotels whose tariffs are above Rs. 7,500, actual hotel bill below Rs. 7,500, movie tickets above Rs. 100.

GST Slab of 28%

Under this slab, over 200 products are covered like cars, cigarettes, durable consumer products, high-end motorcycles, pan masala, weighing machine, cement are covered.

The services under this slab include racing, betting in casinos, the actual bill of hotel stay above Rs. 7,500.

A special rate of 0.25% is levied on semi-polished and cut stones.

No tax Applicable on Goods and Services

There are certain goods and services which are not covered under GST, these are:

Goods: Rakhis without precious metals, bread, salt, sanitary napkins, raw material, eggs, besan, flour, natural honey, curd, sindoor, bangles, handloom, newspapers, deities made of stone, kajal, oat, rye, picture books, color books, manuscripts.

Services: The hotels and lodges with tariff below Rs. 1,000, plus IMM course books, bank charges on the savings account.

GST Tax Slab Rates List for Goods

5% GST 12% GST 18% GST 28% GST
SpicesCakesWashing MachinePersonal Aircraft
Frozen vegetablesDrip Irrigation SystemVacuum CleanerSunscreen
RuskPhotographesPastaTobacco
Fish filletPack water bottle of 20 litreTyresHair clippers
Pizza breadButterBiscuitsBidis
SabudanaMechanical sprayersVanity caseWeighing machine
TeaGheePastriesWaffles plus wafers which are coated with chocolate
Baby milk foodAlmondsSoupsWallpaper
Plain Chapati & KhakhraPouches, purses and HandbagsPreserved VegetablesATM Vending Machine
Floor coveringFruitsCameraYachts
Fertilizers Art ware of iron Curry paste Motorcycles
Footwear under Rs. 1,000 Boiled sugar confectionery Instant food mixes Ceramic tiles
Apparels under Rs. 1,000 Packaged coconut water Shampoo Dishwasher
Real zari Pickle Printers Aerated Water
Agarbatti Mirrors framed with Ornaments Mixed condiments Pan Masala

GST Slab Rates List of Services

List of prominent services under various GST slabs is:

GST Slab Rate Services
5%Aircraft Leasing
Crude and Petroleum products Transport
Passenger transport in economy class by air
Newspaper printing
Passenger transport by cabs and radio taxi
Restaurants both AC and Non-AC
Job work done for leather and footwear goods
Ad space selling in print media
Tailoring
Takeaway Food
Restaurants with turnover of Rs. 50 lakhs
12%Air travel apart from economy class
Common Effluent treatment plants
Movie tickets priced up to Rs.
Building construction for sale
Hotel accomodation with per room per night charge up to Rs. 7,500
Temporary basis IP rights
Crude or natural gas mining and drilling.
18%Outdoor Catering
Theme parks, water parks, circus, folk, theatre, drama, classical.
IT services
Hotel stay with bill above Rs. 7,500
Room tariff above Rs. 2,500 but less than Rs. 5,000 per room per night in Hotels, inns, and guest house.
Telecom services
28%Food/Drinks/Stay at AC Five Star Hotels
Betting at race club and gambling
Hotels, inns, guest house with room tariff above Rs. 5,000
Cinema

GST Council

The 38th GST Council Meeting was held on 18 December, 2019. In this meeting, for the first time, a decision was taken through voting instead of common consensus. Kerala's Finance Minister Thomas Issac challenged the consensus, which led to the first-ever voting in the GST council meeting. The decision was regarding shifting the tax slab of lotteries that are state-run or state-authorized in the uniform slab of 28% in the country. This uniform rate will be effective from 1 March 2020. Out of 28 participating members, 21 states voted in favor of the proposal and 7 were against it.

Other major decisions taken apart from the one stated above were:

  • Those who haven't filed GSTR 1 from July 2017 to November 2019 can file their GST return without late fee till 10 January 2019.
  • Exemption on long term lease for setting up of industrial parks
  • Woven and Non-woven bags to be taxable at the rate of 18%.

GST on Loans & Advances

Before the introduction of GST, service tax was levied at the rate of 15%. Now, GST is levied on loans at the rate of 18%. Considering the rate as per GST being 3% higher than service tax, many people thought it would put an extra burden on EMIs; however, that's not the case. It is because GST is not levied on loan repayment or on interest payment. GST on loans and advances is levied on processing charges and all other charges paid to bank apart from loan repayment and interest payment.

Since GST is levied only on charges, its impact on principal repayment and interest payment is negligible. The rate of GST on popular loans are;
Personal Loan - 18%
Home Loan - 18%
Business Loan - 18%

GST on Cars

The rate of GST on cars is fixed at the rate of 28% for all vehicles of personal use which have petrol or diesel engines. Along with the applicable slab rate, a composition cess is also applicable. Therefore, the effective rate of GST will range from 29% to 50%. For cars driven by the environment, friendly fuels like fuel cells and electricity have lower rates.

GST on Gold

The current rate of GST on gold items such as gold jewelry is 3%. Although 5% of GST is applicable to making charges of gold jewelry when the manufacturing of the jewelry is outsourced to a job worker. A jeweler can avail input tax credit of the making charges. In the final bill to the customer, only 3% of GST is applied.

GST on Real Estate

In the case of real estate GST is levied only when an under-construction property is purchased. From 1 April, 2019 GST is applicable at the rate of 1% for affordable house properties and 5% for non-affordable house properties. The GST rates vary between 5% to 28% for various building materials used for construction. However, no GST is levied when you purchase a ready to move in property.

GST on Food

GST is levied only on packaged food, processed and semi-processed foods which is from 5% to 18%. No GST is levied on fresh food. At present, no food items are included in the 28% tax slab, some products like chocolates, baked products, cakes are included in 18% slab.

Total Revisions in GST Rates

Till date, there have been 38 GST Council Meetings. The last meeting was held in December 2019, in which, for the first time, a decision was taken by voting instead of a common consensus. Twenty-one states voted in favor of shifting lotteries, which are run and authorized by the state government to be covered under the fixed slab of 28%. Apart from this, woven and non-woven bags are also included in the tax slab of 18%.

How GST Rate Impacts on Economy?

The introduction and implementation of GST served as a transforming tool for the Indian economy. It proved to be a game-changer by bringing a net price of all goods and services under a single taxation system. Some of the considerable impacts of GST on the economy are:

  • Single/Uniform Tax Regime: Before the introduction of GST, there were multiple taxes at various points of the supply chain. However, after the implementation of the GST, it has become easier for taxpayers due to uniformity in the tax system.
  • Increased Exports: Due to GST, there has been a drop in the production cost, which has benefited in terms of bringing competitiveness in pricing the exports in the international market.
  • Increased Competition: GST has brought the prices of goods and services down, which has contributed in terms of increased competition and less tax burden on the final consumer. It has also helped in increasing the scope of production.
  • Simple Structure: The single taxation system has simplified the tax calculation. With tax being calculated based on simple slabs instead of going through various tax systems, it has saved a lot of time and effort.

FAQs

What is the GST rate in India?

The GST rate in India for various goods and services is divided under 4 slabs; these are 5% GST, 12% GST, 18% GST, and 28% GST. However, there are some products that do not carry any GST rate.

What is the GST rate on hotels?

The GST rate on hotels after the conclusion of 38th GST Council Meeting are:

  • For the transaction value of Rs. 1,000 and less, the applicable rate is NIL.
  • For the transaction value between Rs. 1,001 to Rs. 7,500, the applicable rate is 12%.
  • For the transaction value above Rs. 7,500 the applicable rate is 18%.

What are the various types of GST?

In India GST are of three types:

  • SGST (State Goods and Service Tax), collected by state and union territories when the transaction is intra-state.
  • CGST (Central Goods and Services Tax), collected by the central government in case of intra-state transactions.
  • IGST (Integrated Goods and Services Tax), is collected by the central government in case of inter-state transactions.

What is the GST exemption for 2020?

There are a number of goods and services which include the list of exempted items for GST. You can get the detailed information from the GST Exemption List

Who decides GST rates?

GST rates and other provisions related to it are decided by the GST Council, which is comprised of 33 members, including Finance Ministers of the state. The Council meeting is headed by the Union Finance Minister.

What is the rate of GST on gold?

The GST rate on gold or gold items is 3%. However, 5% of making charges is also applicable when the manufacturing is outsourced.

What is the GST compensation cess?

GST compensation cess is the cess which is levied additionally to the applicable rate of GST on certain notified goods. This cess is in place for states which host heavy manufacturing activities due to which they face the fear of heavy loss in revenue.

Is GST cess credit available?

Yes, the input tax credit for GST cess is available. Although the credit input availed of GST cess can only be applied against the payment GST cess and not for regular GST rate.


Our News - Sep 2020
  • 2020-09-02 : GST collection hits 88% of August 2019 collections
    GST mop up in August reached 88% of the collection in August 2019. At ₹86,500 crore, it was a tad lower than the ₹87,422 crore mopped up in July. Year-on-year, it was down 12%.
  • 2020-08-31 : SBI reported three ways for bridging States GST revenue shortfall
    State Bank of India proposed three options for states to raise resources to bridge the shortfall in GST revenue from the Centre. This can be done by the Reserve Bank monetising the state governments debts, enlargement of Ways and Means Advances (WMA), or taking recourse to the National Small Savings Fund.
  • 2020-08-28 : Centre proposed 2 borrowing options before States to meet GST compensation shortfall
    Centre proposed 2 borrowing options before States to meet GST compensation shortfall due to COVID 19. The options are RBI will open a special window for the shortfall or facilitate borrowing through the open market.
  • 2020-08-24 : Exemption limit for GST increased to Rs 40 lakh from Rs 20 lakh
    GST Council doubled the limit for exemption the payment of GST on Small business to Rs 40 lakh. Earlier the exemption limit was Rs. 20 lakhs. The hike in the exemption is in lines of the Government efforts to provide impetus to the small business for economic growth.
  • 2020-06-05 : ₹36,400 crores released as GST compensation to States
    The central government released ₹36,400 crores to states as their pending Goods and Services Tax compensation. The payment is for the period of December 2019 to February 2020. The finance ministry released the fund to provide impetus to the state amid the COVID 19 and subsequent lockdown.
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